1. The Allowance Method of recording bad debt expense is required because of the matching principle. Matching principle requires you to record both revenue and expenses for the same period. Hence, Option A is the correct answer.
2. The direct method of recording bad debts can be used in case of all three options. Hence, Option D is the correct answer.
3. Option B is the correct answer.
4. Option C is the correct answer because in times of rising prices and wanting to issue a new stock, FIFO method would result in high inventory valuation
The Allowance method of recording Bad Debt Expense is required because of the: A. B. D....
If a company uses the allowance method of accounting for bad debts which one of the following is true? Violates the matching principle it will record bad debt only when an account is determined to be uncollectible If a company uses the allowance method of accounting for bad debts, which one of the following statements is true? O A. It violates the matching principle O B. It will record bad debts only when an account is determined to be uncollectible...
25. Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $14,000. If the balance of the Allowance for Doubtful Accounts is $3,000 debit before adjustment what is the amount of bad debt expense for that period? A) $3,000 B) $14,000 C) $11,000 D) $17,000
Using the percentage of sales method for recording bad debts expense, estimated uncollectible accounts are $11,000. If the balance of the Allowance for Doubtful Accounts is $2,000 credit before adjustment, what is the amount of bad debts expense for that period? OA. $13,000 O B. $11,000 OC $2,000 O D. $9,000
Sheridan Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $150000 and credit sales are $1510000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Sheridan Company make if the Allowance for Doubtful Accounts has a credit balance of $1500 before adjustment? a. Bad Debt Expense 15100 Allowance for Doubtful Accounts 15100 b. Bad Debt Expense 4500 Accounts Receivable 4500 c. Bad Debt Expense 15100 Accounts Receivable...
Bad Debt Practice Exercises 26. The percentage of receivables method for estimating uncollectible accounts focuses on a net realizable value b. the relationship between accounts receivable and bad debts expense c. income statement relationships d. the relationship between sales and accounts receivable 27. Holman Company uses the percentage of credit sales method. Cash sales are $1,000,000 and credit sales are $4,000,000. Management estimates that 1% of sales will be bad. What adjusting entry will Homan Company make to record the...
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000...
Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $40000. If the balance of the Allowance for Doubtful Accounts is $8000 debit before adjustment, what is the balance after adjustment? a. $48000 b. $32000 c. $8000 d. $40000
Using the percentage of receivables method for recording bad debt expense, estimated uncollectible accounts are $70,000. If the balance of the Allowance for Doubtful Accounts is $14,000 debit before adjustment what is the balance after adjustment? a.) $14,000 b.) $84,000 c.) $70,000 d.) $56,000 According to the key, the answer is C... but I think it's wrong, unless I'm missing something here.
Question 14 (2 points) Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is $6,000 balance before adjustment, what is the amount of bad debt expense for that period? a) $39,000 b) $51,000 c) $6,000 d) $45,000
Windsor, Inc. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $260000 and credit sales are $1040000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Windsor, Inc. make if the Allowance for Doubtful Accounts has a credit balance of $2600 before adjustment? A. Bad Debt Expense 15600 Allowance for Doubtful Accounts 15600 B. Bad Debt Expense 5200 Allowance for Doubtful Accounts 5200 C. Bad Debt Expense 10400 Allowance for...